Audit questions millions in Blackwater contracts

By MIKE BAKER, Associated Press Writer Mon Jul 28, 7:29 PM ET

RALEIGH, N.C. - Private security contractor Blackwater Worldwide and its affiliates may have misrepresented their size to win more than $100 million in government contracts set aside for small businesses, federal auditors said Monday.

A report by the Small Business Administration's Office of Inspector General questioned the agency's decision to approve Blackwater as a small business even though there were signs the company could be much larger than executives claimed.
In fiscal 2005 through 2007, Blackwater and affiliates won 32 small business contracts worth more than $2.1 million even though the work was restricted to companies with revenue of $6.5 million or less, according to the audit. One contract had a revenue ceiling of $750,000. Meanwhile, Blackwater's airline affiliate Presidential Airways won more than $107 million in contracts set aside for companies with revenues of less than $25.5 million or fewer than 1,500 employees.

The audit questioned whether the Moyock-based company, which built its name protecting U.S. diplomats on the volatile streets of Baghdad, could meet either of those limits. The company said last week that it's on track to reach annual revenues of $1 billion per year by 2010.

Blackwater questioned the factual accounting of the audit, noting that one contract on the list was awarded to a small company years before Blackwater purchased it.

"The failure to conduct a meaningful inquiry into the facts or review any of the relevant bid submission paperwork before making such reckless allegations should be disappointing to all," said Andy Howell, Blackwater's general counsel, in a release to The Associated Press. "Blackwater is looking forward to correcting the record."

Auditors urged the SBA to review whether Blackwater's 29 affiliated entities should have any contracts, and they referred all previously awarded work to agencies "for possible action."

Without drawing any conclusions, the audit said, "SBA may want to examine its size decision to confirm whether it made the proper finding and determine whether it is appropriate for Blackwater affiliates to continue receiving small business set aside contracts."

Auditors focused particular attention on the $107 million in work awarded to Presidential Airways, saying Blackwater may have misrepresented its revenue for those contracts. Auditors also questioned the math behind the claim that it had fewer than 1,500 employees.

Several competing companies had filed a complaint in 2006 saying that Presidential was too large for a small business contract for helicopter services. Presidential claimed the Blackwater affiliates had a total of only 715 employees.

An additional 1,000 workers were contractors, not employees, the company claimed.
The SBA had concluded that Blackwater did not supervise the workers in the field — a key factor in IRS rules on what constitutes a contractor or employee — because they were under Department of State supervision. But the audit found that Blackwater contracts indicate the company was required to work with the State Department to establish shift schedules, provide reports, and ensure security personnel compliance.
"In order to be able to fulfill its obligations under the ... contract, it appears that Blackwater was required to do more than merely hire and train the security professionals and provide them to the (State Department)," the audit says.

Auditors were uncertain whether Blackwater was overseeing the operations of their guards.

Blackwater spokeswoman Anne Tyrrell said in a release that "expert accounting and outside legal counsel have determined that Blackwater's classification of security personnel as independent contractors is reasonable, correct and legally protected."
Rep. Henry Waxman, D-Calif., the chairman of the House Oversight and Government Reform Committee, had asked the Small Business Administration to investigate whether Blackwater had complied with small business laws. He's also asked the IRS to investigate whether the company has sidestepped tax laws by defining its guards as contractors rather than employees.

 

Bastards

 

I think stumbler had it right about the "Blackwater - Bush/Cheney" connection and I look for numerous court cases to come out of this and the Bush Administration.

The more time that pasts the more we learn through the media, I wonder what more is to come from all these criminals.With the American economy in a serious down turn and all this coming to light, it really is depressing thinking of all the damage done by this Admin.
And now there News that out saying the American deficit is going to be a half of trillion, our next President certainly has the work cutout for themselves.

 

At least you can't say Blackwater is a Macho organization, what machoismo understates his size.

The Prez will have his work cut out for him, I hope he is up to the task.

The real problem to me is Congress, they are the spenders, will they be up to the task??

 

It is so easy for well connected big businesses to take advantage of the rules that are supposed to help small businesses or minorities. But when it comes to Blackwater everything I've seen suggests to me they are as favored as Halliburton when it comes to getting extremely lucrative government contracts.

We should all be aware of KBR getting the concession contract to supply our troops in Iraq. First it was the water with fecal matter in it, then tainted food and most recently more than a dozen troops have been electrocuted through their shoddy workmanship.

But go back to the beginning when the were first awarded that contract and at the end of something like 37 pages there was about a three sentence paragraph that also awarded all the oilfield services work to Halliburton.

I'm sure the same kind of cronyism has been at play from the beginning with Blackwater and while we may never find out where the billions and billions of missing money went I bet people at Blackwater and the White House do know just by feeling their pockets.

 

There has been a time or two when I have misrepresented my size also....but I was always found out....

 

I second that

 

Blackwater....Haliburton.......Texas.......oil.

Not to mention arms and defence......

get the picture?

 

Wasn't it Dick Cheyney who was the CEO of Haliburton just prior to him taking the role within the government? I could be mistaken, of course, but I do remember seeing something along these lines in an expose in the UK. (Panorama I think).

 

Seen it all first hand

I work in Iraq and it is depressing to see all of the corruption up close and personal. I do Postal work so I do feel good about what I actually do there. I don't support the war, just our troops.

This war is the war of the profiteer. The rich get richer and the poor get screwed. I know so many people who get paid ridiculous amounts of money to do much of nothing. But even that pales in comparison to the profit that all of the CEOs of these companies are raking in while they are completely out of harms way. All at the expense of our soldiers, civilian contractors and the Iraqi people.

Truly a sad state of affairs. It's going to bite our country back hard in the end I'm afraid.

 

The thing is Exar Kun......corruption is rife the whole world over......

it's just a little more transparent in some places more than others.

 

Sad but true. Human nature. There are alot of genuinely good people out there, but in the end the human race is going to destroy itself.

Agent Smith's classification of the human race as a virus has too much truth in it.


Soooo enjoy your life as much as you can and try not to think about it. It can be very depressing.

 

And that the problem,the hole world over but who will pay the price the government some how i don,t think so

 

oh trust me.....they will.....sooner or later.

 

Pssst, lor, we pay the governments tab, always have, always will.

 

Don,t we just it nice to pay for someone else fuck ups